Correlation Between Pan Global and Golden Lake
Can any of the company-specific risk be diversified away by investing in both Pan Global and Golden Lake at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Pan Global and Golden Lake into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pan Global Resources and Golden Lake Exploration, you can compare the effects of market volatilities on Pan Global and Golden Lake and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Pan Global with a short position of Golden Lake. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan Global and Golden Lake.
Diversification Opportunities for Pan Global and Golden Lake
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pan and Golden is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Pan Global Resources and Golden Lake Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Lake Exploration and Pan Global is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Pan Global Resources are associated (or correlated) with Golden Lake. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Lake Exploration has no effect on the direction of Pan Global i.e., Pan Global and Golden Lake go up and down completely randomly.
Pair Corralation between Pan Global and Golden Lake
Assuming the 90 days horizon Pan Global Resources is expected to generate 0.59 times more return on investment than Golden Lake. However, Pan Global Resources is 1.69 times less risky than Golden Lake. It trades about 0.21 of its potential returns per unit of risk. Golden Lake Exploration is currently generating about 0.08 per unit of risk. If you would invest 6.50 in Pan Global Resources on October 26, 2024 and sell it today you would earn a total of 3.38 from holding Pan Global Resources or generate 52.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.5% |
| Values | Daily Returns |
Pan Global Resources vs. Golden Lake Exploration
Performance |
| Timeline |
| Pan Global Resources |
| Golden Lake Exploration |
Pan Global and Golden Lake Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pan Global and Golden Lake
The main advantage of trading using opposite Pan Global and Golden Lake positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan Global position performs unexpectedly, Golden Lake can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Golden Lake will offset losses from the drop in Golden Lake's long position.| Pan Global vs. WT Offshore | Pan Global vs. Constellation Brands Class | Pan Global vs. Celsius Holdings | Pan Global vs. Xtant Medical Holdings |
| Golden Lake vs. Prime Meridian Resources | Golden Lake vs. Macmahon Holdings Limited | Golden Lake vs. Rokmaster Resources Corp | Golden Lake vs. Hudson Resources |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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